Mike Minutes Mastermind 05/21/2024

Been doing super well. My airport, I've tried five different spots to get good Internet but it is not great. So hopefully this is decent enough. Go ahead and send this out.

We're going to jump right into questions.

Okay.

We have five questions today.

3M alert.

First one is from coach Connor.

Price increases seem to be the theme this year. One I think finally I am done. I'm ready for one. As of last night we have 211 recurring clients. 201 or 104.

Sorry. Okay. 201 or 144 budget hours of mowing out of our total $165 of them.

I literally sat in this area because I had just finished boarding of them are ripe for a price increase. Other 10 are on 12 month contracts. I'm wanting to raise the bottom 30% to get to the current standard for the sake of P2P and then also adding A$5 as well as have an actual price increase which is what everyone is going to get if $5 too high or too low. I know the statement of fact. You need a profit year. I have hit labor capacity so I would, I would do two things. If you're going to be more analytical about this and take like the bottom percentage and break it all up, I would do your bottom 30%. I would also raise prices on anyone that was staying more than a customer for more than a year. So that way you don't risk losing customers that you might have gotten the past couple months. But I would raise prices by at least $5. If you're doing a price increase at least $5. I would be more inclined to go more like 7 to $10 on a price increase. The pain of it, you might as well just tear the band aid off. If someone's gonna leave it at 10, they're usually gonna leave at 5. So I would highly recommend if you're gonna do a price increase, don't just do it by $5, at least 7. You pushing it to go more towards 10 if you can. Number two. Especially because you're at capacity, right? So if you're losing customers, who cares you're gonna get them back in a few weeks. So I really, really encourage like raise your bottom 30% but also raise anyone that's been a customer for longer than 12 months. Number two crew's doing wildly well with PPP. Even new team with a lick can hit in the first paycheck. I wanted to do our new pricing based on based off of $9 per hour up to $80. Currently up from $80 currently. I would also decrease P2P from 33% down to 30. It would still give the crew a 2.3% increase in pay per private hour. The majority of it stays in the business. Pockets thoughts on how to go about this conversation? I've never had to lower people fee so I feel the conversation may suck and I wouldn't want someone to quit. I need to raise the prices took me way too long capacity and I only for the business and suffer because of me staying small for too long. Okay great. So you're going to need to explain this math to your team and you're going to explain to them why you need the money. What I would personally show is so your Q4 and your Q1 profit and loss statement and show how much of a hole you dug yourself in the winter. We know we're going to fix that down the road using Christmas lights, et cetera, winter services. However, to convince them of this, you're going to show them the past those two quarters. Be like hey this is how bad it got. We need to be able to get some more money in the business for winter. To do that I'm going to raise prices and I'm going to give a lower percentage of P for P. However, here's what actually happens. Everyone's P for P. It's going to go up. You could do that and then you could prove it like do a do like last paycheck and show hey if we would have charged $90 instead of 80 and we would have lowered down to 33 30%. So 33, here's what you would have made and they realized they would have made like an extra 20, 30 bucks or whatever it was. So I would actually use a previous paycheck to show that.

Ms. Big Bad Wolf of Huntersville, North Carolina in the past what works for Rookie Memorial Day? Do you guys have the guys work and pay them time and a half or do you give them the day off of straight pay? Also if you give them straight pay for the holiday, do you have a nine day probationary period to receive it? So again every single owner is completely different on this and it just needs to be in your handbook. For us we only do time and a half if they if we require them to work we usually just give it off to everybody. We do not pay the day like do a straight day pay but we do two weeks of paid time off every week. So if they want to use it they can. But we do paid time off for the whole year a few weeks. So they can use it whenever they want. But then after the Memorial Day, a lot of them will use that extra day.

Oh my goodness. We're coming with all sorts of nicknames. Masked franchisee. Okay, whoa, whoa. This is a long question. Okay, let's try this.

Coach suggest I ask you here. I am a solo operator who stepped out last summer due to personal issues. Okay. Our growth model is due by October 2024. Okay. Including the grace period to date on our P and L, we made about $72,000 and $3,000 in profit. This includes me putting personal money one to $3,000. Take payroll almost every month. My GM, formerly a field employee who I promoted has been doing mediocre at best at his performance. $0 in savings. My first question is why do you have a GM if you're doing $72,000 year to date? That's like.

You'Re on pace for like maybe 175 to 200,000. Like that's really tough to make any money on.

Okay, let's keep reading. One full time gm, one full time employee and a part time on call as needed. Employee, two trucks. Okay, so we're nowhere close to capacity. Okay. We have just enough work currently for one full time employee and someone part time one to two days a week. But as more customers cancel, less work will be available. Charge $80 per hour to customers. Base pay $20 per hour. PPP 33%. Current efficiency score for the month is 66%.

As of May 20, we have a total of 18 mill slips, cancellations and damage cases in the past three days. Also four total estimates. Three out of four approved. My GM has.

Supportable.

My GM has passed out a few hundred dollars in the past few weeks. Zero leads are coming. As far as I know, I've started coming to my shop every morning. I'm running out of options to keep going. To point out, I love Augusta. I stand behind Mike in the Crest community and my very last reward is to not fulfill me franchisees content and close down. I have another full time job. Aha. This is the kicker. Okay. I was wondering if someone was not making sense. Okay, you have another job that work from home. So I help with ADD and task my business. I like. I like my other job which I went to school for and did before starting a longer business. It's less stressful, pays more and I am flexible with my schedule. One option I have after take talking to my coach is to sit down and with my current GM and employ and share what is going on in the business. Like I am here and hear their thoughts. Yes, I would agree with that. If they want to keep pushing and improve then maybe give them one more shot. If they have little to say or give excuses then it's time to let them go. I also need to sit down with my GM and ask if he wants to continue be to be a gm. Maybe he wants to go back as a field member. Regardless I put him in place before the business could afford it. Okay, we're on the same page. I need him to step back to a field member with hourly and performance pay. Maybe keep him and the on call guy. I strongly feel my GM is what will not like this and will end up quitting. Yeah but at this point like at this size of business, there's no point for anyone to be working outside of business for estimates. So there's.

I would say whoever GM or owner operator in this role, they should be out in the field literally 95% of their day. I would have. I would have to let my one full time employee go first as I need my GM to potentially train a new employee possibly who's a place. My current full time employee causes about 100% of yellow subs. But I hold my GM accountable since he's managing the team and their success and efficiency reflects on him. But going forward I should open up indeed to look for MVP like Touch or Unicorn to run the business while I am assisting from a distance. I need someone who works hard but doesn't want to be entrepreneur. Hey, I know I'm not successful franchise owner but I'm trying my best for my current position and as an owner all this really falls down to me as a leader Ask I I do see any options I can turn around to be successful. Okay.

I would say I don't know when you got the gm. I don't know if that was right from the get go and if you did that from the get go I would say you're probably under capitalized.

If you got GM right from the get I would also say being a solo operator GM is not in the equation. A solo operator is out in the field working, getting it past two 300,000 as fast as possible and they do that by being in the field they should be able to afford putting the money back in the business.

If you're only getting four leads.

Someone'S not planning on doing yours. Oh I see a few hundred total. Got it.

But like all these cancellations etc if you think it's being done by your second like I have a feeling if you did all the work yourself you'd probably get keep all the customers without the GM or the employee. The reason I say is because if you made 72,000, that's January, February, March, April. I'm guessing you're doing like 18,000amonth in revenue, maybe a little less. Like you're just not gonna sustain a general manager that is not fully out in the field. Oh I see you have a full time gm, a full time employee and a part timer. And I'll never work.

The only way this could potentially work around that $20,000. So typically I see a GM RAM model will break even at 20,000amonth. You've got to get it past there as fast as possible possible. So if you're not even there.

You got to get one employee that's going to be the GM and you're not doing enough revenue right now to have two full timers and a part timer. You'll never make money with that side of business. So what would I do in this scenario? Mercy, the GM was way too early. A solo model is not built for DMs. I would personally I don't know how connected you are to your other job. Like this year almost every single person that's closed had another job. So we've been tracking that a little bit and usually our solo operators. But it doesn't take away from the fact that like getting in the job is like okay, it's a safer thing to do. But if you just, you're hiring a gm, if you take their salary and the fact that you're going to be 50% more efficient than them and actually produce revenue compared to them right now trying to be outside the field, I bet you can make up for their, make up the difference there. The question is about October for example, like if you look up the, the.

The.

Switching to growth model.

Like it's been, it would have been two years then to over two years and you're still at this level. So I would really be pushing like can you sell more?

And I feel like the business has been neglected, I'm going to guess since you got another job. And I would imagine, I would just guess that your business growth per month has not has stalled since you became, you know, got another job and got a G on that position and responsible for sales as a last ditch effort. Yes. Having a conversation with your team of being putting all the cards on the table is a good effort. In terms of the October thing, if you're making really good progress, I'd be having a call of Lee And I'd be figuring out okay like if I can get back to the business, if I can get this to say 30, $35,000 a month, can I get until December 1st or something like that.

Or you've got a. Yeah. Oh, he's like, you got to get a GM that's working the field. The business cannot afford a full time GM that is not in the field working. So if you can niche this one person, get a full time GM and a part time employee or maybe a one full time employee and a full time GM that's out working 95% of the day. Like there's no room in this business for any non revenue producing, none whatsoever. $70,000 year to date. The only way you make that decently, remotely profitable. Honestly, the fact that you got 3,000 profit is surprising with this much labor. So I was really pushing that gm and if he bails then yes, you're going to have to go find an employee that can be a GM and wants to work out in the field. And you could potentially pay them significantly more if needs be. Simply due to the fact that right now the person's not making any revenue and they're straight overhead. It's going to run you dry, honestly.

Okay, this is an update. As of today I fired the yellows of the boys. Okay, great. So now you have a GM and you have full time employee. My proposition is take if you're trying to make this work as is, I would recommend having a heart heart conversation with those two people, realizing that if your GM walks out the door, you're going to have one full time employee and you're going to have to manage them and you're probably going to have to step back in the field. But your only hope of actually this model working is to get that GM back in the field. And if a heart to heart conversation is showing the numbers, you're the only thing that's going to fix that. I would highly recommend doing that. Okay, this is hilarious. I don't think any besides the very first question of the day was from someone we know. Okay. In the last week or so I've seen two people at best to leave and go back to their own lawn care brand. What patterns are you seeing leading to this? Let me see. So 1, 2. So the 1, it was a long time coming and someone that a lot of owners actually did not want inside of a destination. And that's not something we ever brought up. And that's just fine. It already been brought to attention from the fac of this individual, and it was just a matter of time, really. So sometimes people, they'd rather be more autonomous, right? They, like this individual, didn't want to learn ppt. They did not want to learn anything with software. They didn't want to put anything into a CRM. They wanted to operate strictly out of like a different way, one person and another individual who had another job. And so if you have another job and you're trying to do this on the side, it's not worth being part of Augusta because you can go get 20 or 30 million customers, do them on the weekend yourself. And so I'm pretty open about at training, like when I run through the different models of two different people when they leave and they scale their business. Like if you're trying to grow a business like 100, 150,000 or like less than that per year, you don't need the franchise. And so it is probably better to just leave if you've now determined that you just want to do this part time. And so that's totally fine. But the consistencies that. What I've seen is they have another job. Usually it's a matter of like financial issues during the winter cause them to go get a job and then they hit the spring rush and they never actually scale. And it's hard to find an employee to do the work while they're not in the field themselves. They decide, hey, I'm going to take 15, 20 customers that are profitable, do them on the weekend and then keep another job. So there's two ways to think about this. One is how do we prevent that? The other one is, would I prevent someone that has the gunk, the gung ho and the work work ethic to scale from not having a lot of capital? Because all these individuals when they joined were very limited in capital. And so we have made the decision, and I should say I have, because the Franchise Advisory Council really, a couple years ago, really pushed to get rid of solo model. And so what I agreed on is, hey, everyone needs to become growth. And we have, we don't have like a requirement in terms of capital. You don't need $150,000 to join Augusta like most franchises, like the financial requirement and net worth requirement. So we don't require those things. However, the vast majority of these decisions made, like getting on the job, et cetera, is caused by lack of capital. And that leads to someone eventually having closed down because they simply don't have enough money to get the inertia required to scale sizably enough in two or three years to be able to get out of the field or hire a general manager, they can only get to 70, 80, 100,000 revenue. And so there's no nothing against those individuals. It's just simply a matter of you don't have the sales chops to really scale. That being said, there's other people have joined the solo model, for example, and they're doing 70, 80, $90,000 a month in revenue now. And they sold, sold, sold and crazily worked hard for two years to get to that level. And so my question is like the debate I have with myself is like, do we a try to look better as a franchise by having less closures and not allowing people in that don't have 80 to $100,000 in liquid cash? Or do we allow someone that maybe has 40 or 50,000 knowing they're going to have to scrape the bottom of the barrel for two, three years and if they don't, they will likely fail. And so setting the expectation is something that we've been better about in the past like 6 to 12 months. Especially with Lee on the upset up front. He's not allowing certain people to become solo models. That should just be growth and that he's not allowing people to join that they don't have at least 20, $30,000 like bare, bare, bare minimum, even if they're solo operators. So we're getting better at that. But I also don't want to prevent someone that is just super hungry. There's plenty of examples in the best that have also joined. They didn't have a hundred thousand dollars in capital. They joined. The solo models become growth models and they're being really successful. So it's a bit of a, a balancing act there. If we were trying to optimize, you know, the franchise to, to sell it or be good in the eyes of private equity, we would increase the net worth and with the capital requirements in the upfront and we cut solo model and most of the people that struggle, they just were under capitalized and then that led to bad business decisions, then getting another job. Not bad businesses, they just usually went the way like they split their attention, started another business, started another job, etc. And a lot of times they just didn't have the sales jobs and that's fine. It's just a matter of I hope that they take whatever they're doing. They take the stuff on the weekend that they're working on that helps them in their business and whatever systems they've learned in August, they can help them with at least those 15, 20 customers or 30 customers they have. And then hopefully one day they learn enough to be able to scale. And we're happy to have them back, most of them. And so that would be the common denominator, though, is split attention between other businesses and other jobs and then inability to sell. And I know that because there are, there are owners that have come and within one month are hiring people. Within one month, they're getting stuck within third trucks. And that's usually their ability to just go sell town pavement, make things happen, get the name out there and scale quickly. So. All right, everyone, hope you have a fantastic rest of your day. See you soon. Take care. Bye.